The Centre Grants Legal Approval for Bike Taxis

By Consultants Review Team Thursday, 15 February 2024

The concept of a bike taxi has been clarified by an advisory notification sent by the Centre to state governments. The Ministry of Road Transport and Highways (MoRTH) released a notification on 22 January with the headline "Motorcycles fall within the definition of contract carriage as per Section 2(7) of the Motor Vehicles (MV) Act, 1988."

With this action, motorcycles are now able to legally function as contract carriages in India, which may lead to the creation of new employment and transportation choices.

The MV Act defines a contract carriage as a vehicle that transports people for hire in accordance with a predetermined contract. In this agreement, the entire car is rented for a predetermined amount of time or distance, with or without a predetermined itinerary. It is not able to pick up or drop off more passengers while travelling, in contrast to public buses.

It is made clear that cars with an engine capacity larger than 25cc that are equipped with fewer than four wheels fall under the category of motor vehicles as defined by Section 2(28) of the MV Act. Therefore, "motorcycles" will be covered under Section 2(7) of the Act, according to the advisory notification. 

legitimate experts advise that states and Union Territories (UTs) will need to amend their policies and procedures to provide motorcycle permits, even though the central notification makes bike taxis legitimate. 

“This advice, released by MoRTH, resolves the regulatory conundrum. The guideline makes it rather evident that two-wheelers fall within the definition of "motor vehicles." State governments ought to heed the advice and register two-wheelers as well as grant contract carriage permits,” said Abhishek Awasthi, senior partner, AZB & Partners.

Experts see the government's action as a start in the right direction towards resolving the issues raised by aggregator businesses and a large number of bike taxi drivers. However, they issue a warning that since road transport is governed by the state, gaining authorization to operate is still difficult.

Furthermore, they emphasise that even though this advice is positive, the MV Act, 1988 is not changed by it.

It is recommended that all states and union territories accept and handle motorcycle contract carriage permit applications in compliance with the MV Act and its implementing regulations. 

The national government's explanation comes amid a legal spat between state governments and aggregators that is still running strong, especially in places where laws governing bike taxis are still unclear.

Bike taxis, according to aggregators, fill gaps in the networks of public transit while simultaneously providing reasonably priced transportation and employment opportunities. On the other hand, the government uses safety concerns and the requirement for compliance with current laws to support its efforts to outlaw bike taxis.

Bans on using motorcycles as taxis have already been implemented in a number of states, including Delhi, Karnataka, and Maharashtra.

Industry insiders predict that states without explicit bike taxi laws will be subject to this warning. These include Punjab, Gujarat, Jharkhand, Chhattisgarh, Maharashtra, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, Kerala, Nagaland, Manipur, Tripura, Arunachal Pradesh, Jharkhand, and Jharkhand.

Industry participants stress that while the Centre has offered some relief, their legal problems remain unresolved. 

Some states, like Karnataka, have capped taxi fares in addition to stopping bike taxi operations. The fact that we won't have to fight on all fronts going forward is a good thing, according to a cab aggregator source. Also, motorcycles are considered "contract carriage." And lastly, in order to accept motorbike permits, states and UTs will need to amend their policies and procedures. This is what the experts has to say. 


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